One of the web’s greatest trolls has focused its attention on Republican presidential nominee candidate Donald Trump. Having skewered Kanye West, President Obama, and Al Gore, “Loser.com” has decided today’s biggest non-winner is Iowa’s runner-up…

What you see if you visit Loser.com…

 

While it may be premature to call him a total loser, his “share price” on PredictIt has collapsed…

 

Still Trump is trading 8 times higher than Jeb as Rubio soars into the money-wagering lead.

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Via Dana Lyons' Tumblr,

Very weak January’s have had a tendency to lead to weak long-term returns in the stock market.

Investors must be thinking, “thank God February is here.” Well, before we put the brutal January to rest, we have one more depressing post. We wrote several posts throughout January on the historic weakness and volatility that was occurring during the month. Previous looks at intra-month variations on the “January Barometer” have pointed to weak returns going forward for stocks. This post will just put a bow on things as we look at the dismal month-end tally and whether it suggests weakness as well.

First off, what was the dismal tally? Well, as of last Monday, the stock market was down -8.84%, judging by the Dow Jones Industrial Average. At that point, it would have marked the worst opening month in 116 years. As it happens, the DJIA rallied furiously over the last 2 days of the month. Even with that rally, though, the DJIA still closed the month down -5.6%, the worst since 2009, and 1990 before that (FYI, we are using the DJIA simply because we have the most historical data on the index).

Can anything be gleaned by looking at other weak January’s, historically? Well, with the usual disclaimers that these seasonal patterns are merely averages and past results do not guarantee anything about future returns, etc…,we took a look at the historical stats. Using the DJIA since 1900, there have been 18 other years in which the DJIA lost at least 4%. Since we are trying to find reasonable comparisons to our present case, we thought to weed out years in which the DJIA had already suffered considerable weakness. Somewhat arbitrarily, we eliminated 4 years that saw the index already down over 20% from its 52-week high coming into the year (1941, 1970, 1978 and 2009).

We were then left with 14 years that began with the DJIA within 20% of its 52-week high and experienced January losses in excess of 4%.

1901 (-6.2%)
1910 (-6.5%)
1913 (-5.4%)
1916 (-8.7%)
1939 (-6.9%)
1957 (-4.1%)
1960 (-8.4%)
1962 (-4.3%)
1968 (-5.5%)
1977 (-5.0%)
1990 (-5.9%)
2000 (-4.8%)
2008 (-4.6%)
2014 (-5.3%)

Returns following the majority of these January’s were significantly weak, as the median returns indicate here. This is especially the case over the longer-term, i.e., up to 3 years later.

 

 

Here is the performance following these events in table format.

The tendency for weakness following these dismal January’s is especially evident when contrasted with the median performance following all January’s, all “up” January’s – and even versus all “down” January’s.

 

 

Again, in table format.

If you believe in these historical, seasonal patterns, there would appear to be something noteworthy about these especially bad January’s. Incidentally, we would rank seasonal factors toward the bottom of our list of investment inputs. That said, the compilation of evidence from all of our posts looking at January weakness makes for a compelling bearish argument – especially over the longer-term, e.g., years.

In other words, if there is validity to the January Barometer, it may more appropriate to call it the January “Bear-ometer” in 2016.

*  *  *

More from Dana Lyons, JLFMI and My401kPro.

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As a result of the rush to global NIRP, which now sees central banks and their sovereigns accounting for over 25% of global GDP, amounting to around $6 trillion in government bonds, trading with negative yields, a question has emerged: when will corporate bonds follow this govvie juggernaut and how soon until investors pay not government but companies to borrow?

That is the focal piece in today’s note by our favorite DB credit strategist Jim Reid who muses as follows:

There is starting to be chatter as to what the incentive is to buy Euro corporate bonds at a negative yield if it ever happens. It may well be tested very soon as one consequence of the recent ECB/BoJ hint/action has been the strong rally in global fixed income.

 

A scatter of the European non-financial corporate yield universe (in today’s pdf) shows we have so far resisted such a move (bar 3 bonds with a bid yield a basis point or two sub-zero). There is a perception that investors won’t buy corporates with a negative yield and therefore a deeper rally in Government bonds would be a spread widener. Whilst this makes some sense the evidence of spread behavior as yields have gone lower and lower doesn’t necessarily support this. 1-3yr and 3-5yr Euro AA spreads have been range bound in the last 6 months – a period that 2 and 4 year Bund yields have rallied around 30bp and 40bps respectively and deep into negative territory. So one might have expected some widening if the zero bound was a hard floor for corporates.

 

Our central view is that zero might be a temporary resistance point if Government yields rally further but that at some point the dam will break and corporates will trade on a spread basis and go sub-zero.

 

Obviously this all depends on whether a further deeper rally occurs. At the moment 2 year bunds are at -0.47% and 1-3yr AA spreads at +58bps so we’re getting closer to testing the theory, especially for the tighter bonds in the index.

 

Is Jim Reid right, and will NIRP soon result in paradoxical outcome of companies paying down debt by issuing debt? The answer is a resounding yes, especially if the ECB cuts its deposit rate lower to -0.4% as the market now largely expects, which in turn forces Japan to cut to -0.2%, forces China to devalue more, and so on, as the next deflationary wave is unleashed in the global race to debase.

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The ink was not yet dry on the seemingly endless Monsanto-Syngenta on again/off again takeover drama, when moments ago in a shocking development the newswires were lit up with news that a new, and very much unexpected, bidder has emerged for the Swiss pesticides giant Syngenta: China National Chemical Corp, or ChemChina as it is known, which according to WSJ and BBG is set to pay $43.7 billion to acquire a piece of Swiss corporate history.

According to Bloomberg, China National Chemical Corp. is nearing an agreement to buy Syngenta for CHF 43.7 billion as the state-backed company extends its buying spree with what would be the biggest-ever acquisition by a Chinese firm, said people familiar with the matter.

More details:

ChemChina, as the closely-held company is known, offered about 470 francs a share in cash to acquire Syngenta and a deal could be announced as early as Wednesday when the Swiss company reports earnings, the people said, asking not to be named as the details aren’t public. That’s 24 percent higher than Syngenta’s last close of 378.40 francs on Feb. 1. Its shares rose 7.1 percent to 405.1 francs as of 1:26 p.m. in Zurich.

 

The deal would help Chairman Ren Jianxin transform ChemChina into the world’s biggest supplier of pesticides and agrochemicals, while snatching an asset coveted by St. Louis-based Monsanto Co. It also underscores the importance China attaches to owning seed and cropcare technology that can boost agricultural output and help feed the world’s biggest population.

Bloomberg notes that if successful, the $43 billion purchase would be the largest acquisition by a Chinese firm, surpassing China Unicom Hong Kong Ltd.’s $29 billion purchase of China Netcom Group Corp. in 2008. It remains to be seen whether Europe’s anti-trust authorities, let alone the Swiss, will greenlight such a massive incursion into the heart of corporate Europe. As a reminder, in recent year major Chinese purchases of both U.S. and Canada-based companies have been frowned upon. Perhaps Europe will decide that it is in its best interest to open its markets to the one country that suddenly is finding it needs to park “hot money” abroad and M&A is just the way to do it.

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• Punxsutawney Phil Does Not see shadow, signifying an early spring (CBS)
• Front-Runners Give Ground as Rivals Make Mark in Iowa (WSJ)
• Republican Cruz bests Trump in Iowa race, Clinton edges out Sanders (Reuters)
• Iowa Narrows the Field (BBG)
• Global stocks snap winning streak as oil pressure returns (Reuters)
• ‘Dark Pool’ Settlements Bring Tangled Relationships to Light (WSJ)
• BP Shares Plunge on Steep Loss Amid Oil Price Slide (WSJ)
• UBS Shares Tank on Wealth-Management Performance (WSJ)
• Oil slips toward $33 as hopes for production cut fade (Reuters)
• Oil-Price Poker: Why the Saudis Won’t Fold ‘Em (WSJ)
• Collapse in crude brings North Sea fields near end of production (FT)
• Who could have seen this coming: For Once, Low Oil Prices May Be a Problem for World’s Economy (BBG)
• EU Publishes Proposals to Address U.K. Demands (WSJ)
• Flood of Oil Asset Writedowns Seen Across Asia on Crude Rout (BBG)
• Spin-off or sale? Yahoo turnaround plan in focus as earnings awaited (Reuters)
• Euro-Area Labor Market Slowly Improves as Jobless Rate Falls (BBG)
• Chinese football clubs go on global shopping spree (FT)
• House Republicans to push Puerto Rico bill by end of March (Reuters)
• BP CEO Says Debt Can Rise to Sustain Dividend During Oil Slump (BBG)
• U.S. budget plan includes over $13 billion for new submarine (Reuters)

 

Overnight Media Digest

FT

* EasyJet Plc plans to test a hydrogen fuel cell system that could save about 50,000 tonnes of fuel per year and cut carbon emissions. This would mean the airline would no longer need to use its jet engines during lengthy taxi operations, like moving the plane from the runaway to the gate.

* Tony Durrant, chief executive of Premier Oil Plc, said the UK oil regulator should have the power to step in and protect big equipment, such as pipelines or oil refineries. Durrant said such powers were needed to ensure that cash-strapped companies didn’t allow old equipment to decline to the point where entire oilfields must close early.

* Alphabet Inc, Google’s holding company, is set to become the world’s most valuable company when stock market trading begins trading on Tuesday, following results that beat Wall Street estimates.

* Ryanair Holdings Plc plans to return 800 million euros ($871.52 million) to investors through its largest-ever share buyback, highlighting how Europe’s leading budget airline has made significant progress to overhaul its aggressive image and poor customer service

 

NYT

– Wall Street got its first glimpse of the financial details of a new conglomerate called Alphabet Inc on Monday. Revenue increased 24 percent in the most recent quarter, positioning the outfit formerly known as Google to become the world’s most valuable company. (http://nyti.ms/1KT4MVb)

– A former Yahoo! Inc manager, who lost his job, filed a suit in California on Monday saying the system, which has been used to fire hundreds of employees, is discriminatory and violates the law. (http://nyti.ms/1PRp3lI)

– American International Group Inc is sticking with a strategic plan that aims to streamline the company but falls far short of calls from activist shareholders like Carl Icahn to break into three. (http://nyti.ms/1Q9pvWz)

– SFX Entertainment Inc, the company created four years ago to capitalize on the popularity of dance music festivals, declared bankruptcy on Monday, after a troubled year in which the company’s founder abandoned a takeover bid and its stock plunged by more than 95 percent. (http://nyti.ms/1Pc7Ld6)

 

Canada

THE GLOBE AND MAIL

** Canada is losing medium skilled jobs at an alarming rate and the system is ill equipped to move workers to where they are needed, including high skilled positions in other industries, according to a new report being released on Tuesday by the CD Howe Institute, a Toronto-based economic think tank. (http://bit.ly/1o1z0k4)

** In a bid to break out of a depressed market for junior miners in general and nickel projects in particular, Royal Nickel Corp announced it was acquiring a stake in Salt Lake Mining, an Australian nickel and gold producer, as well as all of Vancouver-based VMS Ventures Inc, part owner of a copper mine in Manitoba. (http://bit.ly/1o1zo1Z)

** David Baazov, chairman and chief executive of Amaya Inc , owner of the popular PokerStars brand, said on Monday that he and an unnamed group of investors, with whom he is “in discussions”, plan to make a takeover offer for all the shares of the company at C$21 per share, for a total valuation of about C$2.8 billion ($2 billion). (http://bit.ly/1o1zVB4)

NATIONAL POST

** Alberta Economic Development and Trade Minister Deron Bilous and Energy Minister Marg McCuaig-Boyd announced a new program on Monday, which would give companies building new petrochemical plants a total of C$500 million ($357 million) in royalty credits. (http://bit.ly/1o1Alap)

** Canada’s biggest banks are relying more heavily on wholesale funding than their global peers, a situation that tends to raise the risk of periodic difficulties in refinancing debt, according to Moody’s Investors Service. (http://bit.ly/1o1Azi0)

** A pregnant Canadian who travelled to Brazil in December told the National Post that she is facing aborting her baby because she has been refused testing for the Zika virus, which the World Health Organization on Monday declared a global emergency.

 

Britain

The Times

One of Britain’s biggest retailers, Matalan, has been placed in Lloyds Banking Group’s business support unit, which was set up to help troubled companies. It is understood that the heavily indebted fashion and homewares retailer approached Lloyds late last year and asked to be placed in the bank’s support unit. (http://thetim.es/1PNwq7n)

Clydesdale Bank Plc <IPO-CLBP.L> has cleared the final big legal hurdle for its planned stock market flotation and separation from National Australia Bank. The demerger from its parent was approved by the Supreme Court of Victoria, Australia, Monday, allowing conditional trading in the shares of CYBG, the new entity covering the operations of Clydesdale and Yorkshire banks, to begin Tuesday. (http://thetim.es/1PNwJz0)

The Guardian

The founder of easyJet Plc has opened a discount food store that is selling everyday groceries for 25 pence each. Stelios Haji-Ioannou has launched easyFoodstore in an attempt to take advantage of the fast-growing discount market in the UK, which is led by Aldi and Lidl. (http://bit.ly/1PNClJt)

The Telegraph

BT Group Plc has revealed a management shake-up ahead of its 12.5 billion pounds takeover of Britain’s biggest mobile company, EE, having also posted its best quarterly revenue growth in more than seven years. (http://bit.ly/1PNC0Xj)

EasyJet Plc passengers could be served waste water produced by their plane’s fuel system, after the airline unveiled plans to trial zero-emission hydrogen technology. (http://bit.ly/1PNC4WV)

Sky News

Morrisons has announced plans to cut the cost of more than 1,000 “staple” products – in a move likely to add fuel to the ongoing supermarket price war. The UK’s fourth-largest grocer will slash the prices of many items, including fruit and vegetables, by an average of 19%. (http://bit.ly/1PNyrk2)

Eight new projects in UK have been given 20 million pounds ($1.44 million) to research and develop driverless car technology. The money will be used to help improve the communications systems between vehicles and the urban environment – including “talking car technologies.” (http://bit.ly/1PNALr0)

The Independent

The wealthy Indian Gupta family, which owns Liberty House Group and Simec, is looking at plans to float a minority stake in its international steel-to-industrial empire that could value the business at $1 billion. (http://ind.pn/1PNCAnR)

 

via Zero Hedge http://ift.tt/1o25zyl Tyler Durden

It certainly does feel like groundhog day today because while last week’s near record oil surge is long forgotten, and one can debate the impact the result of last night’s Iowa primary which saw Trump disappoint to an ascendant Ted Cruz while Hillary and Bernie were practically tied, one thing is certain: today’s continued decline in crude, which has seen Brent and WTI both tumble by over 3% has once again pushed global stocks and US equity futures lower, offsetting the euphoria from last night’s earnings beat by Google which made Alphabet the largest company in the world by market cap.

Among the drivers for today’s oil weakness was news that Russia pushed their oil output to fresh post-soviet highs amid the recent price slump, as crude output reaches 10.9mln bpd in Jan’16. At the same time JBC said that far from dropping, OPEC output actually rose to 32.42m b/d in Jan vs 32.38m in December.

The oil story was so dominant overnight that not even the surge in Chinese equities did anything to boost sentiment, with the Composite higher by 2.3%. Perhaps a reason for this was that China’s animal spirits are clearing fading, and as reported overnight, margin debt in China’s stock market shrank to the lowest level since December 2014, a sign that the stock market bubble has not only burst but is not coming back: the outstanding balance of margin debt on the Shanghai and Shenzhen stock exchanges dropped for 22 straight days to 897.6 billion yuan ($136.4 billion) on Monday. According to Bloomberg, it fell below the lows reached during a summer rout when the Shanghai gauge tumbled more than 40 percent from mid-June through its August low.

Compounding the bad commodity news was BP’s results, which posted a loss of $6.5 billion: the biggest in its history: 2015 was even worse for the London-based company than its 2010 Deepwater Horizon catastrophe which resulted in a $3.72 billion loss, as the company took charges of more than $40 billion to cover the legal, operational and environmental costs of the Gulf of Mexico oil spill.

Also not helping sentiment was a drop by UBS Group which slid after pretax profit at its investment bank trailed predictions.

“People are very spooked about what they can’t see, and at the moment they can’t see where global growth will come from,” Justin Urquhart Stewart, co-founder of Seven Investment Management in London, told Bloomberg. “In a market like this, less certainty around the U.S. election cycle will add further nerves. The last thing investors need is more background noise.”

A quick summary of where risk stands now:

• S&P 500 futures down 0.8% to 1916
• Stoxx 600 down 1.6% to 336
• FTSE 100 down 1.8% to 5953
• DAX down 1.3% to 9632
• German 10Yr yield down 4bps to 0.32%
• Italian 10Yr yield down 1bp to 1.46%
• MSCI Asia Pacific down 0.9% to 122
• Nikkei 225 down 0.6% to 17751
• Hang Seng down 0.8% to 19447
• Shanghai Composite up 2.3% to 2750
• US 10-yr yield down 2bps to 1.92%
• Dollar Index down 0.04% to 98.97
• WTI Crude futures down 3.4% to $30.54
• Brent Futures down 3.4% to $33.09
• Gold spot down 0.3% to $1,125
• Silver spot down 0.6% to $14.27

Looking at regional markets, we start in Asia where equities traded in mostly in negative territory with yet again oil prices the familiar culprit as hopes over cooperation between OPEC and Non OPEC members in regards to a production cut fades , alongside the tepid lead from Wall Street. As such, the ASX 200 (-1.00%) and Nikkei 225 (-0.6%) were dragged lower by energy names, with the latter also pressured by a stronger JPY. However, the Shanghai Comp (+2.2%) outperformed as the PBoC injected more liquidity into the market via open-market-operations, subsequently providing ample liquidity ahead of the Lunar New Year, while the central bank continued to set a firmer CNY fix. JGBs fell albeit marginally so following a lacklustre auction which drew a lower than prior b/c as well as the widest tail in 10-months.

“It’s still a volatile market,” said Rafael Palma Gil, a Manila-based trader at Rizal Commercial Banking Corp., which oversees about $1.8 billion in assets. “While central banks have become relatively more accommodating, this stance doesn’t remove the concern of a global economic slowdown, with the weakness in China.”

Asian Top News

• Nintendo Profit Falls 36% on Lack of Hit Games, Currency: Wii U, 3DS hardware sales languish despite Splatoon, Mario; 3Q oper. profit +5% to 33.5b yen vs est. 33.2b yen
• Nomura Profit Falls as Firm Postpones Overseas Earnings Goal: 3Q net income 35.4b yen; est. 38.7b yen; bank is on track for sixth straight annual pretax loss abroad
• China Eases Mortgage Down Payment to 20% for First Time Buyers: Will allow banks to cut the minimum required mortgage down payment to 20% from 25% for first home purchases
• PBOC Said to Ask Lenders to Control Wealth Management Funds: China’s central bank has told lenders it will require greater control over the amount of wealth management product funds they give to brokerages and other financial institutions to manage
• Singapore Seizes ‘Large Number’ of Accounts Amid 1MDB Probe: Officials investigate possible money laundering since mid-2015
• Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire: As raw-material prices fall, focus shifts to other businesses
• China’s Top Macro Fund Wagers Against Consumption-Driven Growth: Congrong sees wage growth slowing abruptly in second quarter
• China Hands Investors Risk-Free Returns as IPOs Lure $1 Trillion: Benchmark’s top performers in 2016 are all newly issued stocks
• India Said to Ask Banks at Least $295 Million in Back Taxes: Notices may be issued by April

In Europe, oil once again dictates price action as this week’s continued softness in WTI and Brent translates into weakness in the major indices , led lower by the energy sector. BP is a notable laggard and despite the market being prepared for bad numbers, trades in negative territory by 8.1% after posting Q4 earnings, consequently the FTSE 100 (-1.7%) is a marked underperformer. UBS (-7.9%) also reported earnings today, missing on expectations and warning of further FX headwinds.

European Top News

• Euro-Area Unemployment Falls as ECB Weighs Stimulus Measures: Region’s jobless rate decreased to 10.4% from 10.5% in Nov., est. unchanged at 10.5%; rate at lowest since Sept. 2011
• German Unemployment Rate Falls to Record Low as Job Market Booms: Jobless rate fell to 6.2%, the lowest level since German reunification, from 6.3%; joblessness slid to seasonally-adjusted 2.73m
• Sainsbury Agrees to Buy Home Retail for About $1.9b: Sainsbury will pay about 161.3p in cash and stock per Home Retail share, a 63% premium above the closing price prior to the emergence of discussions, to lead to profit synergies of GBP120m or more
• Danske Bank Unveils $1.3b Share Buyback Program: Said will buy back another DKK9b ($1.3b) in shares; forecast 2016 net profit in line with 2015’s results, before goodwill impairments, 4Q adj. net DKK4.64b vs est. DKK3.74b
• Sanofi, Merck Said to Consider Exiting Vaccine Joint Venture: Sanofi CEO Brandicourt is reviewing the alliance because of a lack of promising assets in the business’s pipeline; venture had sales of about $330m in first half of 2015
• Kuoni Agrees to $1.4 Billion Takeover Bid From EQT Partners: EQT offering CHF370 per B share, 32% above Dec. 30 closing price
• Raiffeisen Shares Jump After Lower Provisions Lift 2015 Profit: Full yr Net income was EU383m compared with loss of EU617m yr ago; profit was better than anticipated because of lower provisions for impairments
• EU Nears Agreement on U.K. Demands After Talks Make Progress: Still ‘outstanding issues’ to resolve, EU President Tusk says
• Fiat Offers New Settings for Diesel Motors to Make Them Cleaner: Carmaker says vehicles have no defeat device to cheat tests, says all its cars comply with emission regulations

In FX, it has been another range bound morning early London, though Asia saw some volatility with AUD/USD swinging up and down in the aftermath of the RBA — which offered little fresh insight overall. However, London markets are testing support levels at .7040, with .7005 seen lower down. USD/JPY lows were extended to 120.33 on Oil losses prompting a knock on effect on stocks, but since consolidating above 120.50.

The euro advanced against all major peers, posting the biggest gains versus the currencies of raw-material producing nations including South Africa’s rand and the New Zealand and Austrian dollars. It climbed 0.2 percent to $1.0913, while the yen appreciated 0.2 percent to 120.79 per dollar.

Malaysia’s ringgit dropped 1.3 percent against the U.S. dollar. Bank accounts related to possible money laundering associated with state-investment company 1Malaysia Development Bhd. were seized by authorities in Singapore and the Swiss Attorney General announced it’s pursuing an investigation into alleged diversion of funds

CAD and other Oil related FX losses contained. USD/CNH pushing through 6.6200.

The Bloomberg Commodity Index, which measures returns from 22 raw materials, fell 0.7 percent, dragged down by falling oil prices. Gold retreated from a three-month high.

WTI and Brent continue to edge lower as North American participants come to their desks, with market expectations of an OPEC- Non-OPEC agreement to cut production waning . Brent is above the USD 33.00 handle, but only just and WTI trades below USD 31.00. Price action in today’s session will likely be dictated too by any further comments from OPEC or energy ministers, if not, then participants will await the release of API Crude Oil inventors to guide price action.

Gold was marginally softer overnight with the precious metal remaining near 3-month highs having touched USD 1,130.11/oz yesterday , near its 200 DMA of USD 1,131.25, while growing confidence in the yellow metal was reflected by holdings of SPDR Gold Trust rising 1.82%. Analysts have noted that this 200 DMA offers an important level of resistance with traders keeping one eye on the jobs report on Friday. Sport gold has retraced some of its gains in recent trade, and has just broken below the 1125.00 level.

Base metals rallied, with zinc climbing to the highest in almost three months, as news of further stimulus in China increased expectations of greater demand from the world’s top commodity consumer.

The move higher, which saw zinc lift 1.3 percent to $1,669 a metric ton and copper push to a three-week high, was amplified by short-covering, according to Citigroup Inc. analyst David Wilson.

In terms of the day ahead, this morning in Europe the focus looks set to be on the labour market reports where we’ll see the latest unemployment rate print for Germany and the Euro area in particular. Euro area PPI is also due out this morning. It’s a much quieter afternoon for data in the US with just the February IBD/TIPP economic optimism reading, along with January vehicles sales data due up. Away from the data we’ll hear from the ECB’s Coeure this morning while later this evening the Kansas City Fed’s George is due to speak on the US economic outlook and monetary policy at 6.00pm GMT. Earnings season continues with 31 S&P 500 companies set to report including Pfizer, Yahoo and Exxon Mobil.

Global Top News:

• Clinton Narrowly Edges Sanders in Iowa; Cruz Upsets Trump: Rubio comes in third in GOP contest marked by high turnout, Clinton’s victory is razor-thin in Iowa Democratic caucus; Iowa Results Slow Clinton’s March Toward the Nomination; Rubio May Consolidate Support as Alternative to Cruz, Trump
• Google Parent To Overtake Apple as World’s Most Valuable Company: Alphabet 4Q adj. EPS $8.67 vs est. $8.09; 4Q rev. ex-TAC $17.3b vs est. $16.9b
• BP Profit Falls 91%, Missing Estimates, as Oil Slump Deepens: 4Q adj. net $196m vs Est. $815m; net loss for the year was $6.5b, the most in at least 30 yrs; adj. profit drops y/y for 6 straight quarters
• Anadarko Cuts Spending as It Seeks to Rebound From Record Loss: Capital budget reduced by almost half to about $2.8b
• UBS Drops as Quarterly Profit Slumps at Wealth, Securities Unit: At the wealth-management unit 4Q pretax profit fell 47% to CHF344m, investment bank had drop of 63% to CHF80m, below estimates of analysts in a Bloomberg survey; raises div. to 85 centimes for 2015 from 75 centimes
• Pentagon Said to Seek 35% Fund Boost for Islamic State Fight: Will seek a 35% increase in funding for the fight against Islamic State in its next budget, bringing the request for U.S. military efforts against the terrorist group to $7.5b
• Goldman Censured by Hong Kong Regulator Over Wing Hang Deal: Goldman Sachs was censured by Hong Kong’s securities regulator for breaching the city’s takeovers code while advising Wing Hang Bank Ltd. on its acquisition by a Singaporean lender
• Google Search Probe by U.S. Should Get New Look, Utah Says: Utah, D.C. urge FTC to revisit case in light of EU complaint
• Fidelity Writes Down Snapchat Holding by 2 Percent: Snapchat had raised funds at $16b valuation last year
• Yahoo’s Employee Ranking Targeted in Mass Termination Lawsuit: Accused in a lawsuit of manipulating employee performance evaluations to justify firing hundreds of workers in order to meet its financial targets
• Monsanto-Created Weedkiller Is Most Used in History, Study Says: About 18.9b pounds of glyphosate have been used globally since sales began in 1974
• Texas Shale Drillers Lure $2b in New Equity to Permian: Drillers in the Permian Basin, the biggest U.S. shale field, have raised at least $2b from share sales over past 8 weeks

 

Bulletin Headline Summary from RanSquawk and Bloomberg

• WTI and Brent continue to edge lower as North American participants come to their desks, with market expectations of an OPEC/ non-OPEC agreement to cut production waning
• Continued softness in WTI and Brent translates into weakness in the major indices, with BP underperforming following poor Q4 earnings
• Highlights include, API crude oil inventories, dairy whole milk powder auction, comments from ECB’s Coeure and Fed’s George
• Treasuries rise overnight as world equity markets resume slide amid declining oil prices ahead of today’s vehicle sales and ISM reports.
• Australia’s central bank will weigh a strengthening jobs market against the impact of recent global financial turbulence in deciding whether to ease policy further, as bank Governor Stevens and his board kept the cash rate at a record-low 2%
• India’s central bank kept the benchmark repurchase rate at 6.75% for a second straight meeting as it awaits details of the government’s budget later this month, providing support for a currency battered by China-led market turmoil
• China’s central bank said it will allow banks to cut the minimum required mortgage down payment to 20% from 25% for first-home purchases to the lowest level ever as it steps up support for the property market
• China Banking Regulatory Commission Chairman Shang Fulin said at a meeting with lenders last month that banks need to avoid risks that could cause systemic problems for the banking sector
• U.S. Treasury Department will issue an estimated $250 billion in net marketable debt in the January-March quarter, compared with $165 billion estimated three months ago, according to a statement released Monday in Washington
• After seeing their borrowing costs rise to their highest level since 2012, U.S. companies may have at least one ray of hope: yield-starved foreign money managers are now holding a record percentage of U.S. corporate bonds outstanding, according to Federal Reserve data
• Nomura, dragged down by its money-losing business outside Japan, posted a 49% drop in third-quarter profit and said an earnings goal for overseas operations will be reached later than initially targeted
• BP Plc reported a 91% decline in fourth-quarter earnings after average crude oil prices dropped to the lowest in more than a decade; the company’s shares fell the most since August
• Hillary Clinton’s campaign declared victory in the closest- ever Iowa Democratic caucus while Senator Ted Cruz of Texas won the state’s Republican caucuses in an upset over billionaire Donald Trump
• Sovereign 10Y bond yields little changed. Asian, European stocks lower; U.S. equity-index futures drop. Crude oil and gold fall, copper rallies

US Event Calendar

• 9:45am: ISM New York, Jan. (prior 62)
• 10:00am: IBD/TIPP Economic Optimism, Feb., est. 47.6 (prior 47.3)
  • Wards Domestic Vehicle Sales, Jan., est. 13.70m (prior 13.46m)
  • Wards Total Vehicle Sales, Jan., est. 17.30m (prior 17.22m)

Central Banks

• 1:00pm: Fed’s George speaks in Kansas City
• 7:00pm: Reserve Bank of New Zealand’s Wheeler speaks in Christchurch
• 9:30pm: Bank of Japan’s Kuroda speaks in Tokyo

DB’s Jim Reid concludes the overnight wrap

The relentless rally that we had seen across rates market so far this year finally paused for breath yesterday. European sovereign bond yields edged anywhere from 3 to 6bps higher (10y Bunds were up 3bps to 0.349%) while 10y Treasury yields finished the session up 2.8bps at 1.949% and off the recent cycle lows. In fact bond yields edged higher despite Oil prices trending steadily lower over the past 24 hours. The soft China manufacturing data as well as some chatter of pushback on an OPEC meeting to discuss potential production cuts combined to send WTI down $2 (-5.95%) and back below $32/bbl.

European equity markets closed with losses yesterday although the Stoxx 600 (-0.19%) did manage to stage a bit of a rebound into the close. In fact sentiment improved from the afternoon session in the US as the S&P 500, after being down as much as 1% managed to recoup all of the day’s losses to at one stage trade with a modest gain, before finishing near unchanged (-0.04%) by the closing bell. Dovish comments from Fed Vice-Chair Fischer helped the positive momentum. Fischer warned as to risks of a slowdown in US growth and inflation given recent global developments with risks of a persistent tightening of financial conditions. The Fed official also acknowledged the possibility of the unemployment rate overshooting the longer-run normal level based on FOMC projections.

Looking at markets this morning, aside from China it’s been a broadly weaker start across the region with no sign of that momentum carrying over from the US session last night. The BoJ-inspired rally in Japan has stuttered with the Nikkei currently down -0.64%, while  the Hang Seng (-0.74%), Kospi (-0.75%) and ASX (-1.00%) are also lower. The moves aren’t being helped by another 2% drop for Oil, while US equity futures are also down around half a percent despite a bumper set of results from Alphabet which saw shares up over 9% in extended trading last night, leaving the company in pole position to overtake Apple as the world’s most valuable company today. The outlier in markets this morning is in China where the Shanghai Comp is up a sharp +2.33% despite no obvious newsflow. Meanwhile the RBA has left its cash rate unchanged at 2% as expected.

The other main overnight development has come in the US Presidential race, with the Iowa caucus in full swing. In what appears to be a surprising swing (given recent momentum) and with 85% of the votes accounted for in the Republican vote, Texas Senator Cruz looks set to beat Donald Trump after accumulating 28% of votes to Trump’s 24%. Significant also is the performance of third placed Senator Rubio, who has won 23% of votes which appears to be more than expected. Meanwhile it’s a closely thought contest for the Democrats with Clinton leading Sanders by less than 1%. The third Democratic who had been in the race, O’Malley, has dropped out. Expect confirmation of the final votes soon.

Back to markets. Yesterday’s economic data was centered on another disappointing ISM manufacturing print out of the US (48.2 vs. 48.4 expected and the fourth consecutive sub-50 reading). The print was 0.2pts higher than the downwardly revised December data but much was made of the drop in the employment component to 45.9 (-2.1pts) and the lowest since June 2009. This of course comes before Friday’s employment report. Meanwhile the December core PCE print was slightly below expectations at 0.0% mom (vs. +0.1% expected) while the same can be said for the deflator (-0.1% mom vs. 0.0% expected). Personal income was up a slightly better than expected +0.3% mom in December (vs. +0.2% expected) while personal spending missed (0.0% mom vs. +0.1% expected). Meanwhile construction spending notably undershot relative to consensus estimates at +0.1% mom (vs. +0.6% expected).

Moving on. Yesterday we also got some comments from ECB President Draghi who made reference to the effectiveness of recent QE measures, specifically that ‘second-round effects’ were occurring while reiterating that the ‘weaker than anticipated growth in wages together with declining inflation expectations call for careful analysis ahead of the upcoming meeting next month. Draghi also made some comments on the UK and specifically that ‘a solution that would anchor the UK firmly within the EU while allowing the euro area to integrate further would boost confidence’. As far as Brexit negotiations, EU President Tusk is set to send a draft proposal at some point this morning which is set to be the used to form the basis of discussion for EU heads of state at the February 18th/19thsummit around the UK’s future relationship with the EU. Tusk highlighted that good progress has been made with the hope that both sides can come to agreement ahead of a possible UK referendum as early as June.

Before we take a look at today’s calendar, the other notable takeaway from yesterday’s newsflow was the Fed’s latest survey of senior loan officers. The survey, covering Q4, showed that lenders were said to have tightened lending standards on commercial and industrial loans, and expect to tighten further in 2016. The survey did however suggest that banks had moderately eased standards for mortgages and auto loans for households.

In terms of the day ahead, this morning in Europe the focus looks set to be on the labour market reports where we’ll see the latest unemployment rate print for Germany and the Euro area in particular. Euro area PPI is also due out this morning. It’s a much quieter afternoon for data in the US with just the February IBD/TIPP economic optimism reading, along with January vehicles sales data due up. Away from the data we’ll hear from the ECB’s Coeure this morning while later this evening the Kansas City Fed’s George is due to speak on the US economic outlook and monetary policy at 6.00pm GMT. Earnings season continues with 31 S&P 500 companies set to report including Pfizer, Yahoo and Exxon Mobil.

via Zero Hedge http://ift.tt/1RXFhJV Tyler Durden

 

 

Hold your real assets outside of the banking system in a private international facility  –>  http://ift.tt/1M1FiG5 

 

 

Gerald Celente: Get Prepped For Global Systemic Collapse

Posted with permission from Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

More ridiculous predictable market action today. The worse things become in the real world the more frantic the stupidity becomes. The American authorities are clearly terrified that their world role as hegemon is being threatened and it is not beyond the realm of possibility that your fears of war will turn out to be a reality. – John Embry

It was reported last week that a Government panel is recommending that all adults over the age of 18 should be screened for “depression” – LINK. Nothwithstanding the fact that the term “depression” is a subjective concept, it exemplifies the move in the Government to control the population. It’s a frightening movement toward Totalitarianism that has been in motion since the formation of the Federal Reserve and the ratification of the16th Amendment, giving the Federal Government authority to enact an income tax. Both events occurred in 1913.

Make no mistake about it, the Government panel’s recommendation, if it finds its way somehow through Congress, is an underhanded way for the Government to implement gun control. We can’t have depressed people running around with guns in their possession. In addition, there’s no doubt that one of the big drug or hospital corporations has devised some sort of “depression screening” protocol which generates very high margin profits. Even better if the testing is covered by Medicare and Medicaid so the taxpayers can fill yet another big trough from which corporate America feeds.

The irony in the Totalitarian creep of the Federal Government is that humans don’t like the idea that they can’t control their immediate lives and living environment. Thus, they want to believe with surprising adamance that their vote matters – that they can control the outcome of an election with their “participation” in the process. Of course, nothing could be farther from the truth. The fact of the matter is that the modern Presidential process has become little more than the political version of “The Jerry Springer Show.” It’s like watching a slow motion train wreck repetitively with the now-frequent “debates” and “town hall” meetings.

Sorry. Maybe if you could vote for each of the well-funded 25 lobbyists per elected House Rep and Senator your participation in the process might matter. The only part of an election campaign that matters is the amount of money that gets apportioned by Wall Street financial firms, big pharmaceutical companies and the defense industry. Democrats who think Big Labor matters better think again – just look at the scale of the de-industrialization of America which has converted the majority of the U.S. manufacturing workforce into Walmart greeters and bartenders.

Perhaps the only safe refuge from this insanity and from the systemic destruction headed our way is to move as much of your wealth out of the fiat currency based financial system and into the safe haven of precious metals. Of course, Wall Street and the Government-controlled propaganda disseminators – otherwise known as mainstream financial media – are doing their best to discourage investors from even learning how to spell “gold.” It’s the barbarous relic of cavemen which you can’t eat and doesn’t earn interest. It’s about as useful as a Pet Rock.

What they won’t show you is this graph:

This graph shows the performance of gold (red line) vs. the British pound, euro, yen, Swiss franc and commodity index since Jan 2000. The elitists running our system don’t want you see that graph because that graph embodies the truth about the deteriorating economic, political and geopolitical condition of both the U.S. and the world. Better to have you focused on Trump vs. Cruz or Trump vs. Clinton. And Obama clearly doesn’t care because he now spends most of his time golfing in Hawaii and staying at his future $10 million enclave – paid for by the Pritzker Family and Company.

The Shadow of Truth hosted Gerald Celente for what we believe may be his best podcast interview in quite some time. It borders on cerebral and we presented Mr. Celente with several thought-provoking questions – we think you will enjoy this side of the world’s foremost trends forecaster:

 

 

 

 

 

 

When people lose everything and they have nothing to lose, they “lose it.” – Gerald Celente on the Shadow of Truth. 

 

 

Gerald Celente: Get Prepped For Global Systemic Collapse

Posted with permission from Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.

 

 

 

 

via Zero Hedge http://ift.tt/1P2E4xn Sprott Money

Moments after the “disestablishment” Ted Cruz (even if Goldman may have a lien or two on said disestablishmentarianism), was announced to be the winner of the Iowa Caucus, a most unexpected commentator appeared among the flood of the otherwise traditional Twitter noise with what can only be classified as the pinnacle of polarizing political commentary.

What is most surprising is that the source of this commentary was none other than the entity that is, at least in theory, supposed to be the most apolitical organization in the US: the Federal Reserve, and specifically the Fed which spawned current Fed Chairwoman Janet Yellen: the San Fran Fed.

The tweet in question appeared at precisely 10:56pm Eastern, or 7:45pm Pacific, and it was the following:

 

Oh wait, that’s right: moments after the Tweet the Fed realized what an epic snafu it had done, and promptly deleted the tweet.

Luckily, we caught it so everyone can observe and enjoy just how “apolitical” the Fed, and its employees, truly are:

We wonder: does the San Fran Fed deny there is any truth to this tweet? Or maybe, like the Dallas Fed, it simply does not keep a log of what it tweets?

That aside, perhaps the San Francisco Fed and its staffers can explain what “matters”?

Is it Goldman Sachs? Or JPMorgan?

Or any other bank that the “Board” has decided it is time to bailout?

Because suddenly an entire nation is curious if not a state of 3 million Americans, then what exactly “matters” to the apolitical Federal Reserve whose purpose is to serve, well, the people of America?

via Zero Hedge http://ift.tt/1NNVwl5 Tyler Durden

Submitted by Jeff Thomas via InternationalMan.com,

On a daily basis, I receive emails from associates in the UK and Europe that speak of the sheer madness of allowing refugees in the millions to pour into Europe. The riot in Cologne, Germany, by some 1,000 men who sexually assaulted 90 women, and robbed and threatened others, offers insight as to the scale of riots that we may expect to see in the future.

And the immigration of refugees is just beginning. The shock and horror that my associates express evidences that never before in their lifetimes have events such as these taken place, and that far worse is yet to come.

We tend to view this “scourge of the demon” as though it’s something new. Yet, in fact, it’s occurred many times before.

Randolph Bourne:

“War is the health of the State.”

When there is warfare, people will subjugate themselves to the state as at no other time. They will allow themselves to be taxed and used as cannon fodder, and to have their rights stripped away, as they are in an “emergency” condition that requires sacrifice but will (hopefully) be over soon.

Unfortunately, it’s not intended to be over soon. Perpetual conflict means perpetual increase in power by political leaders. Therefore, the leaders will claim that they want it to all be over as soon as possible, but they actually will seek the opposite. Of course, the people don’t desire conflict, so they have to be fooled into believing that it’s necessary. The Nazis had a thorough understanding of this principle.

Hermann Goering:

"Why of course the people don’t want war. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country."

It’s pretty easy to stop the “invasion” by Muslims into Europe, yet we see the EU making threatening noises to all member countries that if they don’t open the floodgates and let them in, there will be hell to pay. The EU government itself is therefore creating the problem that it will later claim it’s trying to control. The wars (Afghanistan, Iraq, Yemen, Libya, Egypt, Palestine, Syria, and more) are intended, in part, to push tax dollars into the military industry and, in part, to create a distraction from the economic mismanagement of the central government. The creation of large numbers of refugees (both real refugees and opportunists) is an additional benefit to the government, as they will create disharmony and fear throughout Europe as they fail to assimilate.

Hitler used the Jews as his excuse for creating a police state and going to war. The EU (and its allies) will create a crisis, then invoke martial law as an “unfortunate necessity” in order to contain the problem they’ve created. Goering, Goebbels, and Hitler knew quite well that you first have to create a demon, then you can subjugate your people in an effort to control that demon.

But, in doing so, you need a good marketing programme. You need regular propaganda going out to work the people up into a lather.

Joseph Goebbels:

“Think of the press as a great keyboard on which the government can play.”

On both sides of the Atlantic, governments, with the eager but blind assistance of the press, are creating a crisis of epic proportions. It’s essential that they do so, as they have already created an economic crisis of epic proportions and they need a distraction from that problem—one which allows them control over the people and the assurance of staying in power. Throughout history, warfare has provided that power for one group of political leaders after another.

It’s also important to make the people feel helpless, so that they’ll turn to their government to solve the problem. Therefore, the ability for individual retaliation must be taken out of the hands of the people.

Adolf Hitler:

“This year will go down in history. For the first time, a civilized nation has full gun registration. Our streets will be safer, our police more efficient, and the world will follow our lead into the future!”

The EU government are presently causing the problem through mass immigration by refugees. But, surely, the very idea that such an influx of uncontrollable people could be a good thing is preposterous. How could anyone ever believe that any good could come of this?

Adolf Hitler:

“Make the lie big, make it simple, keep saying it, and, eventually, they will believe it.”

The “Muslim question” has been made into a political issue. Conservatives who see themselves as “sensible” will oppose the immigration, whilst liberals who see themselves as “caring” will support it. The extreme polarisation between factions will ensure that the lie (as absurd as it is) will receive the immovable support of roughly 50% of the population of Europe (and countries abroad).

Still, intelligent people are saying to each other every day, “Don’t these politicians get it? Don’t they understand that this influx of Muslims is a disaster in the making?” Well, yes, actually, they understand that all too well, which is why they’re all on board.

As in both of the previous world wars, we shall see the charade play out again. Each country in Europe will, in turn, join the war with “the enemy.” At some point, Russia will get dragged in, either through an overzealous military action, or through a false-flag attack, and a world war will be on.

The US and Canada, at first, will just contribute armaments and advisors, but, eventually, the American people will be persuaded that, without their involvement, the Muslims will overrun America as well. If the Americans don’t fall into line on cue, false-flag incidents will be created that will cost American lives that point directly to Muslims. Again, this is nothing new. The Americans have been dragged into war repeatedly in the same way in the past.

The question is not whether Muslims will overrun Europe. They will. (That’s the objective.) The question is not whether there will be war. There will be. The question is whether you live in a place that will be safe when it occurs or whether your present location will become unlivable at some point.

Of course, there will be those who recognise that, in this game, their own government is not their friend. Some will choose to prepare an exit plan, should it become necessary. Internationalisation offers the greatest likelihood of insurance against the threat of an overreaching government.

Insurance, after all, is purchased not due to a certainty that something will go badly wrong. It’s purchased when a disastrous outcome is likely enough to warrant having that insurance in place.

*  *  *

Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion.

All you can hope to do is to save yourself from the consequences of all this stupidity.

We think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.

But if you want to be truly “crisis-proof” there's more to do…

Most people have no idea what really happens when a government goes out of control, let alone how to prepare…

How will you protect yourself in the event of a crisis? This just-released PDF guide Surviving and Thriving During an Economic Collapse will show you exactly how. Click here to download the PDF now.

via Zero Hedge http://ift.tt/1SUTU10 Tyler Durden

It’s now been nearly a year since the world woke up to what Beijing was doing in the South China Sea.

Early in 2015, satellite images seemed to show that China had embarked on a rather ambitious land reclamation effort in the Spratlys a disputed island chain claimed by Brunei, Malaysia, the Philippines, and Taiwan.

As the months wore on it became readily apparent that this was no small project. Ultimately, China would build 3,000 acres of new sovereign territory atop reefs in the area much to the chagrin of Washington’s regional allies.

Especially disconcerting for the US was the construction of a giant runway on Fiery Cross Reef (one of the artificial islands).

It’s long enough to land military aircraft and just last month, Beijing began to land planes on the man-made outpost.

China also build a number of other things on the islands including cement factories, greenhouses, ports, and a lighthouse. 

Beijing contends it has every right to continue its construction efforts. In fact, China says it can forcibly expel other nations from the area if it so chooses.

As the summer wore on, the situation devolved into a war of words between Beijing and Washington with each accusing the other of acting “aggressively” in the Pacific. Each side also swore up and down that in the end, the “agression would not stand – man.”

The staring contest lasted until late October when, after months of deliberation, the Obama administration sent a warship to the islands in what Washington called a “freedom of navigation” exercise. 

Fortunately, China didn’t shoot at the vessel, but Beijing was profoundly displeased. The Pentagon patted itself on the back for reasserting America’s right to control the shipping lanes through which some $5 trillion in global trade pass each year and Washington promptly decided to conduct the exercises several times per quarter. 

As it turns out the US has so far kept its promise. Late last week the USS Curtis Wilbur, a guided missile destroyer, sailed within 12 nautical miles of Triton island. 

China is not happy.

“The so-called freedom of navigation plans and acts that the United States has upheld for many years in reality do not accord with generally recognised international law,” Chinese Foreign Ministry spokesman Lu Kang told a daily news briefing on Monday.

Lu didn’t stop there. He also accused the US of “ignoring numerous littoral states’ sovereignty and security and maritime rights [on the way to] seriously harming relevant regional peace and stability.”

And just to drive the point home, Lu delivered the following sharply worded assessment: 

“Its essence is to push the United States’ maritime hegemony in the name of freedom of navigation, which has always been resolutely opposed by most of the international community, especially certain developing nations. What the United States has done is dangerous and irresponsible.”

What’s particularly interesting there is that it was just last month when we reported that Japan is set to build a missile blockade in the East China Sea in order to keep China from exerting complete control over regional waters. 

In other words, both sides say the other is attempting to establish maritime hegemony. Of course there’s one glaring difference: these are waters are nowhere near the US mainland. Why should the US get to decide what goes on in China’s backyard? 

via Zero Hedge http://ift.tt/1PRflQ7 Tyler Durden